RoundDepositsRequired Reserves of 20%Excess ReservesNew Loans50% of loan proceeds are held as currency in circulation by peopleLoan proceeds redeposited1$500$100.00$400.00$400.00$200.00$200.002$200$40$160$160$80$803$80$16$64$64$32$324$32$6.40$25.60$25.60$12.80$12.805$12.80$2.56$10.24$10.24$5.12$5.126$5.12$1.02$4.10$4.10$2.05$2.057$2.05$.41$1.64$1.64$.82$.828$.82$.16$.66$.66$.33$.339$.33$.07$.26$.26$.13$.1310$.13$.03$.10$.10$.05$.05Totals$833.25$166.65$666.60$666.60$333.30$333.30 Calculate the new money supply. Calculate the money multiplier.

Money supply is the the sum of total money in the liquid form present in the economy at a given…

Answered: Round Deposits Required Reserves of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Round	Deposits	Required Reserves of 20%	Excess Reserves	New Loans	50% of loan proceeds are held as currency in circulation by people	Loan proceeds redeposited
1	$500	$100.00	$400.00	$400.00	$200.00	$200.00
2	$200	$40	$160	$160	$80	$80
3	$80	$16	$64	$64	$32	$32
4	$32	$6.40	$25.60	$25.60	$12.80	$12.80
5	$12.80	$2.56	$10.24	$10.24	$5.12	$5.12
6	$5.12	$1.02	$4.10	$4.10	$2.05	$2.05
7	$2.05	$.41	$1.64	$1.64	$.82	$.82
8	$.82	$.16	$.66	$.66	$.33	$.33
9	$.33	$.07	$.26	$.26	$.13	$.13
10	$.13	$.03	$.10	$.10	$.05	$.05
Totals	$833.25	$166.65	$666.60	$666.60	$333.30	$333.30

Calculate the new money supply.

Calculate the money multiplier.

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